More offshore support vessels need to be removed from the market if unsustainable North Sea rates are to be increased, according to Fletcher Shipping managing director Keith Fletcher.
The boss of the Scottish operator told TradeWinds the North Sea market is recoiling to 2015 levels faster than the industry thought possible.
"It is definitely worse than 2015 because none of us have legacy contracts which have adequate returns to support idle vessels. In addition, owners no longer have a ‘war chest’," he said.
"That is why we have now witnessed circa 34 vessels which have headed for lay up since 1 April."
Fletcher Shipping itself has stacked four ships to reduce costs and protect owners' investments, Keith Fletcher said.
"Every vessel swinging around their anchor waiting for their next cargo run is burning at least £5,000 ($6,100) per day," he added.
Rates are approaching historic lows for platform supply vessels, with rates reported at £2,000 per day, or possibly even lower, according to shipbrokers.
A total of 46 PSVs are in lay-up in North Sea ports, as the market reels from coronavirus restrictions and the oil price slump.
More stacking needed
But Fletcher warned that this will not be enough.
"In reality, we need to remove a further 20 to 30 vessels from the market before we can start to influence rates. Today’s day rates ... are unsustainable for all owners," he said.
"It’s a bold move to remove vessels from the market. However, as I’ve said before, the definition of insanity is doing the same thing over and over and expecting a different result."
Fletcher Shipping, a PSV specialist, has won more work in the renewables sector of late, where rates are more "robust".
Keith Fletcher said his company has a good track record supporting this market, winning its first contract in 2015 to remove seabed debris at the Rampion Offshore Wind plant with the 4,500-dwt FS Pegasus (built 1996).
He added: "Since then we have carried out various charters including cable reburials on the Nordergrunde windfarm and noise mitigation using bubble curtains in the German and Belgian offshore renewable sectors."
Fletcher Shipping has recently fixed the 3,200-dwt PSV FS Abergeldie (built 2008) for three years to work in the German windfarm sector, serving the TenneT plant.
It has also taken on management of the 3,300-dwt PSV World Peridot (built 2013), formerly owned by major client SD Standard Drilling.
This ship has been taken out of lay-up for a charter in the renewables sector with Rhenus Logistics.
The deal could see the World Peridot called on to work anywhere in the German, Dutch, Belgian and Danish renewables industries.
Green gains
Fletcher Shipping also has another vessel supporting the Neart na Gaoithe windfarm construction off the east coast of Scotland, again carrying out the relocation of boulders and debris removal.
"This is a contract which commenced at the end of 2019 and is expected to take the vessel through to the fourth quarter of this year," Keith Fletcher said.
"Our vessels, operations, procedures and personnel are equipped to support the offshore energy sector and we see no difference between oil and gas or renewables. The two sectors have similar quality, safety and performance demands."
He added: "Vessel day rates are similar. However, contracts in the offshore renewables sector appear to be more robust, unlike those in oil and gas, which, of late, are worthless."
